UBS Sourcing Strategy Shifts



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Earlier this month UBS announced the sale of its India Service Center subsidiary to Cognizant [link to Cognizant interview]. UBS CEO Oswald Gruebel was quoted as stating that UBS has decided to opt for a buy rather than build strategy for its outsourcing needs, to improve efficiency, reduce costs and increase flexibility. SSON speaks with UBS's Vipul Khanna, Global Head of Group Offshoring for UBS.

SSON: Vipul, what were the key drivers to UBS's decision to sell its Indian captive?

Vipul Khanna: The sale of the India Service Centre marks the next stage in the development of the UBS offshoring and outsourcing strategy. In recent years, the availability and maturity of third-party outsourced services has grown significantly. UBS has therefore decided to adopt a 'buy' rather than a 'build' strategy for its outsourcing needs. This will take advantage of the scale and expertise of third parties to improve efficiency whilst reducing costs and increasing flexibility.

SSON: How will the new outsourced agreement change UBS's service cost?

Vipul Khanna: While the commercial rationale for the sale is compelling, it will also allow UBS more cost variability, and to pursue innovative operating models. The partnership with Cognizant is a good cultural fit in terms of a captive heritage and entrepreneurial leadership team. The India Service Centre has a highly-skilled talent base with expertise in complex capital market processes that, coupled with Cognizant's technology capabilities and domain expertise, extend the end-to-end services that can be delivered to UBS.

SSON: Were concerns exacerbated by market and currency risk in India over the past year?

Vipul Khanna: No.
 
SSON: what does the shared services/outsourcing equation look like at UBS today?

Vipul Khanna: Our operating model seeks to buy rather than build services wherever possible. The sale of the India Service Centre to a third-party represents one component of the overall UBS outsourcing and offshoring approach. In addition to third-party services, UBS will continue to build out the existing capabilities of the Poland Service Centre (PSC) as the main service provider for activities and processes that need to be performed internally by UBS.

SSON: How do you distinguish between services that 'need to be performed internally' and those that can be comfortably outsourced?

Vipul Khanna:
The decision to outsource to a third party or seek recourse to internal offshoring services is guided by a number of factors. These vary from case to case but typically include legal, regulatory and/or competitive considerations.



Vipul Khanna is the Global Head of Group Offshoring for UBS based in Hyderabad. He has been with the organization since 2005 and led the efforts in establishing the bank's captive centers in India and Poland. In his role, he works with UBS businesses to develop their offshore strategy and service deliver respective needs from the offshore centers. Over the last three years these centers have developed strong capabilities in BPO, Research & Analytics, and IT Infrastructure services underpinned by a strong core of operational excellence and competency development.

Prior to joining UBS, Vipul worked for e-Funds International and was an intrinsic part of the organizationÕs growth in India from a small core team of 20 to nearly 4,000 people in a few years. Initially, he was responsible for setting up the Transition function, subsequently he moved to Operations and set-up the Mumbai centers. In his last role, he was Vice-President and Head of India Operations, managing all BPO business across finance services, retail, and telecom verticals.